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Sicily is great! Trains and buses pretty much encircle the island. The interior is a bit less accessible, buses, but few train routes. We had a car for a few days as well - driving is easy enough, but parking, getting lost, etc. take a lot of time (rental cars in Italy are the most expensive in Western Europe - about $100/day avg./with gas, insurance, etc.) - I'd much rather be on the trains; they bring you to 'where you want to be'.
I loved the south-eastern area (Syracusa vicinity) the best - Boroque architecture, incredible food...Sicily is cheaper than 'Italy', but nothing is cheap any more. I went there in 2001 with a budget of $100/day (single traveler) and treated myself to a 'nice' dinner at night, usually pizza-ish for lunch, breakfast in the hotel - I never felt like 'I can't afford to do that' (museum, etc), and I really was able to stick to my budget. I went back in 2003, with friends, but still a single traveler, and with $130-150/day I had to skip a few 'nice' dinners and limit my 'extras' to stick with the budget - (this is with hotels, not hostels, both times)
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